Analys från DailyFX
Technical Weekly: USD/JPY 115.50-116.00 is a Clear Trading Barrier
- EUR/USD – 13 week momentum turns positive
- GBP/USD parallels just below
- USD/JPY resistance within the bull channel
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EUR/USD
Weekly (LOG)
Chart Prepared by Jamie Saettele, CMT
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“1.0530 and 1.0460s. Those are the 2 levels that I’m paying attention to. 1.0530 is the December 2015 low and 61.8% of the rally from the January low. 1.0460s is the March 2015 low and year open price. Recall that a key reversal occurred in January. Second, there is divergence with RSI (monthly mind you). Third, the decline from 2008 channels. The described conditions suggest a major bottoming scenario but if a new low is made then pay attention to 1.0200 (channel line). The long term trigger for upside acceleration is the parallel near 1.1150.” EUR/USD continues to hold up at long term support and 13 week momentum just turned positive, which is a plus.
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GBP/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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The Cable question is, ‘double bottom or consolidation on the way to 1.1000?’ 1.1000 is the top side of the 1980-1992 trendline (not shown on this chart). Parallels from the 2014-2015 trendline continue to define GBP/USD support and resistance. Only strength above the parallel that was just resistance would indicate an important behavior change (relieve downside pressure) and trigger a double bottom with the October and January lows (target 1.3400-1.3500).
AUD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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Recent notes have remarked that “the view that an important bullish base has formed remains but the action of the last 3 (was 1, then 2, and now 3) weeks at resistance (.7700-.7835) warns of a pause in what has been the trend of 2017.” Aussie is off for a second week. The October and December 2015 highs at .7385 will be a level to pay attention to for support. Keep the RSI comments in mind. “Weekly RSI has peaked at/near 60 on every bounce since after the 2011 peak. RSI at the 2 most recent lows (January 2016 and January 2017) are near 40, which is a positive. In other words, the momentum profile has improved which increases risk of an upside break.”
NZD/USD
Weekly
Chart Prepared by Jamie Saettele, CMT
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The 2015-2016 trendline is still lower. Bigger picture, I’m not sure what to think. Is the rally from August 2015 countertrend or a new trend? The 2016 and YTD highs are at major resistance from the 2011 low and a double top target is still unmet at .5899. Also, weekly RSI failed before 70 at the latest top which is typical of a bear market rally. A break under the 2015-2016 trendline would suggest a good deal more downside. Until then, keep an open mind.
USD/JPY
Weekly
Chart Prepared by Jamie Saettele, CMT
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USD/JPY has turned up within its channel (see USD/JPY – Just a Dip?) but preference remains for sideways trade. There are a few reasons for wanting to fade strength and buy weakness (range trade), chief among them is the fact that the 13 week average is flat and price levels are well defined. Generally speaking, 115.50-116.00 has been important on both sides of the market since December 2014. As long as price is below the level, the zone is resistance.
USD/CAD
Weekly
Chart Prepared by Jamie Saettele, CMT
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“The rally from May 2016 is corrective so the bias is for impulsive weakness but I don’t like being bearish into support (parallels).” The USD/CAD rally highlights why it’s not a great idea to be bearish into such clean support. Naturally, focus is now on the resistance parallel which is above the December high. The proximity of that parallel to the horizontal high increases risk of a bull trap on a push through the December high (failed breakout).
USD/CHF
Weekly
Chart Prepared by Jamie Saettele, CMT
See REAL TIME trader positioning
“USD/CHF remains supported above the 55 week average but the rate has tended to pivot in the first half of March the last 4 years (see black circles). With Swissie rallying into this period, I’m keen on a top. Even so, this is no-man’s land. The levels to know are the nearly 6 year trendline (.9850 on log scale and just above .9700 on arithmetic) and topside of the wedge near 1.0450 (line off of 2012 and 2015 highs). A break of one of these technical barriers ideally leads to one of the largest moves in years (nearly 6 year wedge is underway).”
What’s inside:
- EURUSD broke the ‘neckline’ of a bearish ‘head-and-shoulders’ pattern, April trend-line
- Resistance in vicinity of 11825/80 likely to keep a lid on further strength
- Targeting the low to mid-11600s with more selling
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Coming into last week we pointed out the likelihood of finally seeing a resolution of the range EURUSD had been stuck in for the past few weeks, and one of the outcomes we made note of as a possibility was for the triggering of a ’head-and-shoulders’ pattern. Indeed, we saw a break of the ’neckline’ along with a drop below the April trend-line. This led to decent selling before a minor bounce took shape during the latter part of last week.
Looking ahead to next week the euro is set up for further losses as the path of least resistance has turned lower. Looking to a capper on any further strength there is resistance in the 11825-11880 area (old support becomes new resistance). As long as the euro stays below this area a downward bias will remain firmly intact.
Looking lower towards support eyes will be on the August low at 11662 and the 2016 high of 11616, of which the latter just happens to align almost precisely with the measured move target of the ‘head-and-shoulders’ pattern (determined by subtracting the height of the pattern from the neckline).
Bottom line: Shorts look set to have the upperhand as a fresh month gets underway as long as the euro remains capped by resistance. On weakness, we’ll be watching how the euro responds to a drop into support levels.
For a longer-term outlook on EURUSD, check out the just released Q4 Forecast.
EURUSD: Daily
—Written by Paul Robinson, Market Analyst
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EURUSD: Retail trader data shows 37.3% of traders are net-long with the ratio of traders short to long at 1.68 to 1. In fact, traders have remained net-short since Apr 18 when EURUSD traded near 1.07831; price has moved 9.6% higher since then. The number of traders net-long is 15.4% lower than yesterday and 16.4% higher from last week, while the number of traders net-short is 0.4% higher than yesterday and 10.5% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests EURUSD prices may continue to rise. Positioning is more net-short than yesterday but less net-short from last week. The combination of current sentiment and recent changes gives us a further mixed EURUSD trading bias.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
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Why and how do we use IG Client Sentiment in trading? See our guide and real-time data.
GBPUSD: Retail trader data shows 38.2% of traders are net-long with the ratio of traders short to long at 1.62 to 1. In fact, traders have remained net-short since Sep 05 when GBPUSD traded near 1.29615; price has moved 3.4% higher since then. The number of traders net-long is 0.1% higher than yesterday and 13.4% higher from last week, while the number of traders net-short is 10.6% lower than yesterday and 18.3% lower from last week.
We typically take a contrarian view to crowd sentiment, and the fact traders are net-short suggests GBPUSD prices may continue to rise. Yet traders are less net-short than yesterday and compared with last week. Recent changes in sentiment warn that the current GBPUSD price trend may soon reverse lower despite the fact traders remain net-short.
— Written by Christopher Vecchio, CFA, Senior Currency Strategist
To contact Christopher Vecchio, e-mail cvecchio@dailyfx.com
Follow him on Twitter at @CVecchioFX
To be added to Christopher’s e-mail distribution list, please fill out this form
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